\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 74 Yusys Technologies Co.Ltd(300674) )
Matters:
The company issued the annual report of 2021. The report shows that in 2021, the company achieved an operating revenue of 3.726 billion yuan, a year-on-year increase of 24.97%; The net profit attributable to the parent company was 396 million yuan, a year-on-year decrease of 12.60%; Deduct non net profit of 362 million yuan, an increase of 22.53% year-on-year. It is proposed to distribute a cash dividend of 2.0 yuan (including tax) for every 10 shares.
Ping An View:
The digitization of the banking industry has been promoted rapidly, and the company’s software development and innovation business have achieved rapid growth. As an important participant in Bank Of China Limited(601988) IT market, the company can provide IT solutions and services required by all links of bank operation and management. Especially in the fields of credit, regulatory compliance and big data, the company’s market share is in the forefront of the market. In 2021, Bank Of China Limited(601988) digital and online development accelerated, and the application of scientific and technological innovation in some major banks accelerated. The demand in the company’s advantageous fields maintained rapid growth. In 2021, the company’s software development business realized a revenue of 2.860 billion yuan, an increase of 28.16% over the previous year. At the same time, the innovative business of credit operation developed by the company in recent years continued to maintain rapid growth, and the annual revenue reached 164 million yuan, a year-on-year increase of 46.49%.
The gross profit margin decreased compared with the previous year, and the net profit deducting non net profit still increased rapidly. In 2021, the company’s comprehensive gross profit margin was 34.15%, a decrease of 1.00 percentage points over the previous year. Due to the strong demand of the industry, the fierce competition for financial science and technology talents, the year-on-year rise of labor costs and other factors, the gross profit margin of software development and service sector in 2021 was 37.77%, down 2.41 percentage points from the same period of last year. During the period, the cost control was good. The cost rate in 2021 was 23.63%, 0.71 percentage points lower than that in the same period of last year. In addition to the increase of R & D cost rate, the proportion of other expenses showed a downward trend. The management efficiency of the company was improving, and the embodiment of scale effect also led to the decrease of sales cost rate. In 2021, the net profit of the company decreased by 12.6% compared with the same period of the previous year, mainly due to the increase of the base of non recurring income brought by the disposal of associated enterprises in the previous year; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 362 million yuan, an increase of 22.53% over the previous year.
The smooth progress of ecological construction and the completion of fixed growth will help the company improve its market position. In 2021, the company strengthened cooperation with Huawei, Baidu, Tencent and head database manufacturers, launched a number of joint solutions, and achieved success in the financial information and innovation market, including the replacement and migration of data warehouse of a joint-stock bank and the domestic distributed database project of a city commercial bank. In addition, the company and fintech companies with banking background are also strengthening cooperation and exporting their own capabilities, with obvious results. Among them, the company’s Supervision products have participated in a series of smart supervision projects of national regulators and local financial regulators through cooperation with CCB Jinke, realizing a win-win situation. The company will complete the fixed increase in 2021 and raise 1.115 billion refinancing funds. The company will use the raised funds to continue to invest in product and technology research and development, continue to iterate on distributed and micro service architecture technologies and platforms, continue to strengthen the competitiveness of products and technologies and consolidate the leading position in the industry under the background of financial technology localization.
Investment suggestion: from the perspective of trend, there is still a large development space for bank it, and the company is expected to benefit from the rising prosperity of the industry. IDC predicts that from 2021 to 2025, the compound growth rate of Bank Of China Limited(601988) it solution market scale will reach 18.73%. As one of the leading enterprises in the banking IT industry, the company is expected to benefit from this round of digitization of the banking industry and localization of it. According to the company’s annual report and the development of the industry, we adjusted the company’s profit expectation. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 537 million yuan (the former value is 609 million yuan), 680 million yuan (the former value is 781 million yuan), 854 million yuan (New), and EPS will be 0.76 yuan, 0.96 yuan and 1.20 yuan respectively. The corresponding PE on March 30 will be 23.7x, 18.7x and 14.9x respectively. We are optimistic about the company’s track and maintain the “recommended” rating.
Risk tips: 1) risk of intensified industry competition; 2) The risk of hindering the progress of innovative operation business or overseas business; 3) The risk that the bank’s IT investment is less than expected.
